China Ports Star Performers Despite Economic Crisis

7/31/2019 China Ports Star Performers Despite Economic Crisis

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China Ports Star Performers Despite Economic Crisis

Only the top 10 Ports of China have collectively handled 129 million TEUs in FY 2011-12

Port of Shanghai set to retain its title as the worlds largest container terminal for atleast another year

CHINESE ports maintained their dominance of the global container shipping rankings in 2011,recording robust throughput despite the European debt crisis and stagnant US economy.

Asia bagged the top eight places and six of those positions were accounted for by mainland Chinaand Hong Kong, with Shanghai at the top of the ladder at 31.74 million TEUs, up 9.3 per cent from theprevious year. Mainline vessels set records both at the Waigaoqiao port facility and the traditional

container hub at Yangshan, helping Shanghai overtake Singapore by more than two million TEUs.

China and the Far East


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The Far East dominates the box traffic league with 45 per cent of global box volumes handled in thearea. The Far East will retain its position as the dominant container-handling region in the world formany years to come as it is expected that the current share of about 45 per cent will rise due togrowth prospects in Asias intra-regional trades which are set to outpace those of many other regionsin the world.

The economic and business inter-dependency between China and other countries in the Far East isincreasing and this is fuelling box traffic. China, for example, is a source of raw materials for someproducts/countries, a semi-finishing location for others and a final assembly/manufacturing location forcertain other goods.

Another factor that will maintain the container momentum in the Far East is Chinas readiness to signadditional bi-lateral free trade agreements with its neighbours. The governments of China, Japan andSouth Korea reached an agreement in May to launch negotiations for a three-way trade pact this yearand follow successful treaties with the ASEAN bloc and Australia. The pact, if signed, could liftChinas GDP by up to 2.9 percent, Japans by 0.5 percent, and South Koreas by 3.1 percent,

according to the Ministry of Commerce. Singapore maintained its second position with a modest 6.1per cent increase in throughput to 29.37 million TEUs.

The Port of Tanjung Pelepas of Malaysia, which has direct shipping links with Shanghai, Shenzhen,Tianjin and Qingdao among others, has been one of Asias fastest growing container port. The portdid not make it on the top 10 list but showed a handsome 15 per cent growth in throughput last yearto 7.5 million TEUs.

Indonesias largest port Tanjung Priok (Jakarta) in 2011 handled 5.8 million TEU which is one of thefastest rates of growth recorded anywhere in the world that year. The Malaysian ports of Port TanjungPelepas (PTP) and Port Klang are also adding further container-handling capacity while ensuring theircurrent facilities are operating efficiently. Port Klang too posted approximately 10 per cent jump over2010 level.


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Elsewhere in South East Asia, Vietnam remained one of the most bullish economies. Why China Rules?

Market liberalisation in the Chinese economy has brought its economy forward by leaps andbounds. Forecasts for 2015 predict Chinas GDP to reach $9,982.08 billion, growing 10-12 per cent

per year between 2010 and 2015. In the last 30 years, the rate of Chinese economic growthhas been almost miraculous, averaging 8 per cent growth in Gross Domestic Product (GDP)per annum.

Chinas economy is huge and expanding rapidly. It already has the biggest economy after theUnited States and most analysts predict China will become the largest economy in the worldthis century.

The Chinese economy experienced some radical transformations since 1978. From being anexcessively centrally planned economy it matured to a more open economy and is now thegrowth engine for the world economy for the past ten years.

Driven by rapid economic growth and rising incomes, the standard of living has risen and

consumer goods are now within the grasp of the common man. Between 1978 and 2002, the amount of goods passing through Chinese ports had increased

tenfold. China, the fourth largest country in terms of size after Russia, Canada and the USA is now

the worlds second largest economy after the USA. Tremendous comparative advantage in terms of cheap labour and low production costs has

given Chinese goods an edge over others in the world markets. Data for the past three years reveal that the country has been maintaining a high growth rate

in the GDP of around 8 per cent to 10 per cent annually. One of the defining features for the Chinese economy came on the December 11, 2001 when

it became a member of the World Trade Organization or WTO. The Chinese accession to theWTO meant that Chinese economy opened up more to the rest of the world and its trade withJapan and the ASEAN nations (Association of South-East Asian Nations) increased rapidly.

With more free movement of goods and services in the area, Chinas neighbours wereexposed to a much larger market which had a substantial effect on the reduction of productioncosts. This also resulted in greater flow of foreign investment attracting Foreign DirectInvestment (FDI) to China.

Ports are important gateways for China's domestic and foreign trade. According to the Report onChina's Shipping Development 2010 by China's Ministry of Transport, 12 of the top 20 ports in theworld are on the Chinese mainland.

In 2011, the top ten ports of China collectively handled 129 million TEUs, up almost 10 per cent on2010s level. All of the nations main ports posted rise in their throughput volumes.


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From January to April 2012, ports in China recorded a throughput of 3.09 billion tonnes, up 7.5 percent year-on-year. Container throughput increased 8.4 per cent to 54.17 million TEU and waterwaycargo traffic grew 8.9 per cent to 1.41 billion tonnes. Turnover grew 10.9 per cent to 2.54 trilliontonnes per kilometre, reports Xinhua.

Important Chinese PortsA.P. Mller unit invests $500 million in Ningbo expansion

APM Terminals has taken a 25 per cent stake in a project to expand capacity at Ningbo, Chinas third-largest container port that involves a $500 million investment by Denmarks A.P. Mller-Maersks portarm.

APM Terminals and its Chinese partner Ningbo Port Group, which has a 75 per cent stake in theproject, will jointly invest and operate berths 3, 4 and 5, comprising a one-kilometer quay in NingbosMeishan Container Terminal. The new berths will have a maximum capacity of 2.8 million TEUs.

The new facility will become operational by Dec. 31, 2014, Netherlands-based APM Terminals said.We believe in China and will continue to invest in its development, APM Terminals CEO, Mr KimFejfer said.

Ningbo, a major gateway port in Eastern China, is the worlds 6th largest container hub, with traffictotalling 14.5 million 20-foot equivalent units in 2011. At current growth rates, Ningbos capacityutilisation will exceed 80 per cent by the end of 2012, and the Meishan project represents the futuresource of capacity, APM Terminals said.

As you might imagine, you cant have an important maritime industry if you dont have large ports tohandle the coming and going of freight. At least eight ports in China are among the 30 busiest in theworld for freight containers; these ports ensure that commercial traffic continues unabated around theworld.

Considering all the economic adversities, the increase in container throughput at Chinese ports wasquite satisfactory last year with a general growth rate of 11.2 per cent, said Mr Chen Changgeng,Secretary-General of the Container Sub-Association under the China Ports and Harbours Association.Mr Chen expects similar growth in 2012.

The final results of top 10 containers in 2011 as well as last years ranking are close to the forecastsmade by the centre in mid-2011, except for the swap of positions between Guangzhou and Qingdao.

The boom in domestic trade was reflected in the throughput growth at Suzhou Port along the YangtzeRiver. It grew the fastest among mainlands top 10 at 28 per cent. It was followed closely byLianyungang at 25.3 per cent and by Dalian at 22.1 per cent. Mr Chen expects a 22 per cent growthin domestic trade this year and a smaller 12 per cent growth in foreign trade.


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Ningbo-Zhoushan formed from a merger of Ningbo and Zhoushan terminals maintained its growthlargely because of foreign trade. In January, the No. 6 global port had a throughput of 1.39 millionTEUs, the fastest growth among Chinas coastal ports.

Ningbo over the years has expanded sourcing of containers attracting business from areas deepinside Zhejiang province as well as neighbouring Jiangxi.

The Ningbo-Zhoushan Port, in east Chinas Zhejiang province, came in on top, with an annualhandling capacity of 694 million tonnes of throughput in 2011, according to the statistical bulletin.

The central government will allocate 45 billion Yuan ($7.15 billion) in the 2011-2015 period to facilitateinland navigation.

Leading the way were smaller ports such as Yingkao and Lianyungang which both registered gains of16 per cent in the opening quarter of the year.

In sharp contrast, Dalian, Tianjin and Qingdao all located in Bohai Bay posted decent rates of

growth in 2011 and Q1 12. Such ports also have a more diversified trading profile than Shenzhen,with the intra-Asia trades and emerging markets, contributing more cargo.

Cities such as Xian, Chongqing and Wuhan have benefited from high levels of internationalinvestment and their river port facilities are experiencing exceptionally strong rates of growth.

In general, this development will still feed cargo into Shanghai and its various terminals as themajority of cargo is transhipped here for destinations across the globe. And this will also meanShanghai will maintain its premier box hub status for the foreseeable future.

Here is some information about Chinas booming ports at Shanghai, Shenzhen, Qingdao, Tianjin,Guangzhou, Xiamen, Ningbo and Dalian.

Port of Shanghai

This worlds busiest commercial port lies near the middle of Chinas 11,000 mile long coast. It is theleading port in the T-shaped waterway network composed by the Yangtse River and the coastline,and is also Chinas largest comprehensive port and one of the countrys most important gateways forforeign trade. The port is also located in a very developed industrial area, surrounded by the highlypopulated Jianghan Plain and Sichuan Basin, which help provide the necessary labour to operatesuch a huge port.

The commerce done through the Port of Shanghai is equivalent to a quarter of all of Chinas foreign

trade. Container liner services from the Port of Shanghai cover all major ports around the world. Morethan 2,000 container ships depart from the Port every month, en route to North America, Europe, the


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Mediterranean, Persian Gulf, Red Sea, Black Sea, Africa, Australia, Southeast Asia, Northeast Asia,and other regions.

Port of Shenzhen

This port is one of the fastest expanding trade centres in mainland China. Geographically, it is locatedin the south, only 20 sea miles from Hong Kong. This placement makes it the most important port fortrade between the economically flourishing island and the mainland. Nearly 35 million tonnes of cargopassed through the port in 2005, and it continues to increase by double-digit percentages. The port isexpanding by building more container berths and container port areas.

Port of Qingdao

Qingdao Port, a seaport, is an important hub for international trade and sea-going transportation fromthe Yellow River. Qingdao Port has established trade relations with more than 450 ports in more than130 countries and regions across the world. It is now the worlds seventh largest port in totalthroughput and the worlds eighth largest port in container volume.

Port of Tianjin


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Tianjin port is located at the mouth of the Haihe River, in Bohai Bay on the Chinese coast. Theconstruction of the port marks the largest artificial harbour and river port in the world. Liners travel

from Tianjin port to 300 ports around the world.

Port of Guangzhou

The port of Guangzhou is currently the largest comprehensive port in the south of China. The portserves the Pearl River Delta region, the Guangdong province, and the surrounding provinces ofYunnan, Hunan, Hubei, Guangxai, and more.

As the largest comprehensive hub port in South China, Guangzhou Port Group possesses 49 berths,13 buoys and 23 anchorages each of 10,000 tonnage-class and the largest capacity to be 300,000

tonnes. In 1999, Port of Guangzhou broke its annual throughput record of 100 million tonnes, to bethe second port in Mainland China with such achievement.

In 2010, the whole Guangzhou Port accomplished 410 million tonnes (ranking 5th in the world) and12.55 million TEUs (ranking the 7th of the world), and Guangzhou Port Group alone reached 270million tonnes and 9.85 million TEUs.

Port of Lianyungang


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Lianyungang port continues to benefit from its location at the head of the China rail bridge.

Lianyungang has been successful in diverting some cargo from exporters based in Japan and SouthKorea that had used rail to Europe but via the Russian ports of Vostochniy and Nakhodka.

Lianyungang has also benefited from high levels of investment in industrial ventures with the resultthat containerised imports and exports have built up solidly in recent years. It was a main reason forthe ports more than 25 per cent surge in box volumes in 2011.

Port of Xiamen

Port Xiamen is located in the Fujian Province on the Chinese coast, close to the island of Taiwan.

It is the 30th largest container port in the world, and the 8th largest on the mainland of the China.Port of Ningbo


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The port of Ningbo sees some of the most shipping traffic in China it is one of the few ports inChina to exceed 100 million tonnes of throughput in a year. Geographically, the port is located inZhejiang province. It trades manufactured goods and raw materials with nearly 600 ports around theworld.

Port of Dalian

Dalian port, located on the Yellow Sea in north China, is the second largest container shipment port inthe mainland. Its location makes it an important centre of trade for the Pacific, although it also hastrading routes with 300 ports around the world.

Learnings for India

Chinas ports have already started down the road to differentiation. Shanghai is positioning itself as atranshipment hub for Northeast Asia, Guangzhou is emphasising its cost advantages and Shenzhenis promoting its logistics capabilities. This approach will spread to other ports as they seek a positionof competitive advantage with each port exceeding in its performance level. Indian ports need toimbibe these approaches to attain similar throughput.

The berth productivity of International terminals have Quay productivity in the range of 2000 TEUs/mtberth length while except for JNPT, none of Indian container ports are comparable and therebymaking it evident that the Indian Ports are still constrained at the Effective Capacity levels and need toremove these inefficiencies to advance up to the stage of Potential Capacity and Absolute Capacitylevels.

China has been winning big projects here and elsewhere in the region because its companies offerlower costs. Chinese companies are also competitive because they have acquired a lot of expertise inbuilding large infrastructure projects.

Chinese companies have become the biggest suppliers to ports displacing companies of othercountriesdue to their high efficiency and low costs.


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China has especially strengthened the container transport system, concentrating on the constructionof a group of deep-water container wharves at Dalian, Tianjin, Qingdao, Shanghai, Ningbo, Xiamenand Shenzhen, and thus laying the foundations for Chinas container hubs.

China, under its current five-year plan, is seeking to increase the efficiency of its ports and their

hinterland infrastructure.

Dredging, in China, continues up and down the Yangtze to deepen and widen the channels and rivervessels are being standardised on bigger and modern designs. Training has been improved and thelatest management technologis implemented along the river. Dreding has improved access foroceangoing ships at Yangtze ports.

China and India have been luring companies to increase their bilateral trade. China has access to theIndian Ocean where India has long been the main player and makes full use of the opportunity.

Hence, shipping companies have set sights on growing China-India trade with a virtual scrambleamong global container lines to upgrade their services to participate in the burgeoning trade betweenChina and India.

Thus, in the event of a general slowdown of the US economy with a sluggish growth in the Asianpowerhouse Japan too, it remains to be seen whether the Chinese economic boom will burst like abubble in the long run. With the Chinese Stocks facing bullish growth in the event of relative socio-economic stability in the Chinese economy, China is sure to become the investors choice in the nextdecade.

It also forecasts another year of growth for Chinese ports, with the Port of Shanghai set to retain itstitle as the worlds largest container terminal for at least another year.

It can be said that the hard-earned growth is the result of increased trade with emerging economiesand a rise in imports.

China is a game-changer, rather than a new player in the worlds maritime industry.a

China Ports Star Performers Despite Economic Crisis

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